Resolution Insurance halts issuance of non-medical policies

Resolution Insurance has halted the writing of new non-medical policies for the next three months as the firm runs into financial headwinds.

In a notice on Tuesday, the underwriter says recent capital raising measures have experienced significant delays exposing the company to working capital constraints.

“General insurance has experienced delayed settlement of claims and non-establishment of requisite reinsurance treaties. This exposes the policyholders and the company to huge cashflow risks should a claim arise,” noted the insurer.

The suspension of the insurer’s non-medical business has been done in consultation with the Insurance Regulatory Authority (IRA) and seeks to safeguard the interests of policyholders.

Resolution is hoping to concentrate on its medical business while eliminating non-core processes and structures.

As the underwriter seeks to close out new funding, the board says it is in the process of nominating new directors.

Acting Managing Director and Principal Officer Bernard Githinji is however expected to continue serving in management in the interim.

Resolution’s liquidity crunch comes just one year on since the underwriter entered a transaction to sell a majority stake to US-based Linkham Group through Leapfrog Investments with the latter having bought a controlling stake in the insurer in 2014.

Resolution began first as a medical underwriter in 2002 before a business and regional expansion drive in 2013 which saw it stretch its legs to the East African market.